Trade Targets Under Trump’s “Greatest Deal” Slip Away

Written by SK Ashby

For a variety of reasons you're most likely aware of, it has always been unlikely that China would more than double their purchases of American farm goods over the next two years to highs never seen even before Trump's trade war or the coronavirus pandemic, but we know that's not going to happen now.

After initially reporting that China's ruling party ordered state-controlled importers to stop buying American farm goods in response to Trump's increasingly belligerent behavior, sources say China's importers actually did book another shipment. But there's a catch.

The new orders are small and they're for late this year.

The purchases, totaling at least 180,000 tonnes of the oilseed, were for shipment in October or November, the peak U.S. soy export season when American soybeans are usually the cheapest in the world, three U.S. traders with knowledge of the deals said. [...]

Earlier, two sources familiar with the matter said China told state-owned firms to halt large-scale U.S. soybean and pork purchases. One of them said state purchases of U.S. corn and cotton have also been put on hold.

The soybean sales on Monday were small compared to recent purchases by state-owned firms totaling 1 million tonnes or more at a time.

Many things could change between now and November, but if this is it; if this is the last shipment they order this year, they won't meet the targets set under "phase one" of Trump's "biggest and greatest deal."

This is purely speculation on my part, but it may not be a coincidence that the new orders are scheduled to fall right around or on the election. Soybeans may be cheaper in October, but it's also possible that China is sending a signal that they could easily cancel these orders at the last minute if Trump doesn't play nice over the summer.

I don't think it will take that long. We could be days or weeks away from some sort of official action regarding our relationship with Hong Kong and the possibility of more sanctions on Chinese companies or officials.

If I were in China's shoes I would have already canceled everything and told Trump to get fucked, but that's why I'm just a writer and not a public official. China may be ruled by a single party with total control, but even they have constituent concerns and policy needs to manage a country of 1.4 billion.